Fierce Next Gen: As gene therapies proliferate, pharma and payers look to avoid 'cost shocks'

Increasingly, cell and gene therapies are changing the treatment landscape for various cancers and rare diseases. As the pricey treatments become more popular, will their costs shock the healthcare system, or will biopharma companies and payers come together to ensure affordable access?

During a panel discussion for the Fierce Biotech Next Gen virtual event, experts representing a range of industry leaders discussed the important topic. While the experts noted several promising trends in access talks, there's potential for hazard ahead, one warned.

In the U.S., Novartis has the most experience marketing a gene therapy after its 2019 FDA approval for spinal muscular atrophy treatment (SMA) Zolgensma. Despite the drug's $2.1 million price tag in the U.S., cost analysts at the Institute for Clinical and Economic Review (ICER) endorsed the drug for its ability to benefit SMA patients and deliver savings to the healthcare system. 

During this week's panel discussion, Novartis Gene Therapies' global head of value and access, Tay Salimullah, said his company has been able to secure 80% coverage on Medicare and commercial plans in the U.S.

Outside of the U.S., Novartis has worked “hand in hand” with health technology assessment agencies by sharing data to convince them of Zolgensma’s value. While there can be a “delay” between approval and reimbursement in some markets, in Europe, Novartis created a program called “Day One" to counter that delay. Under that program, the company guaranteed up-front access for patients, then it honored reimbursement and pricing decisions in individual countries afterward, Salimullah said. 

While Novartis has been able to scale its gene therapy efforts with Zolgensma, “our work has only really just started,” he added. 

Looking forward, the Novartis exec said he thinks the biopharma industry’s gene therapy capabilities will continue to grow. The industry is “rewriting our playbook” for marketing with cell and gene therapies, Salimullah said, and should prioritize its discussions with payers. The more details that pharma companies and payers can exchange with each other up front, the better, he said.

Brett Sahli, assistant vice president of pharmaceutical trade relations at Prime Therapeutics, said he thinks drug companies will increasingly figure out how to get across the FDA "approval hurdle" with cell and gene therapies. Beyond that, the challenge will be around delivering gene therapies in a way to minimize "cost shocks" to the system, Sahli said.

"I think it's going to be focused a lot around the patient and member experience, and data," he added.

Kelley Miller, senior director of managed markets for the specialty pharmacy Optum Frontier Therapies, said there are three major considerations for his team during coverage talks. One is the clinical landscape, while another is the "human" element of what the patients and their families are going through. Thirdly, the team looks at the "economic impact" of the treatment.

Once Miller's team has that information, the "conversations should come fast and furious," he said.

Despite the biopharma industry's advances in gene therapies, ICER president Steven Pearson, M.D., M.Sc., said it’s still a “fairly dicey business proposition” for companies in this field, especially outside the U.S. He pointed to bluebird bio’s decision to pull beta thalassemia gene therapy Zynteglo from the European market last year.

While Pearson didn’t want to pass judgment on Zynteglo’s European price tag of 1.58 million euros, he said there’s “still a risk” that next-gen therapies will not flourish “even in developed countries’ health systems.” 

Globally, the challenge is even bigger, he said. Pricing for therapies in the millions of dollars makes access “impossible” in many places, Pearson said, “unless it's on a completely compassionate or other basis outside the developed countries.” 

Looking forward, Pearson sees the possibility of “both success and the ripples of potential disaster" in gene therapies. 

In ultra-rare conditions, he thinks payers will get “better and better” at finding ways to cover the next-gen meds. But for more prevalent diseases, coverage talks will present entirely new challenges, he said.

To illustrate his point, the ICER president brought up a piece of biopharma history. When Gilead Sciences launched its costly hep C medicines Sovaldi and Harvoni back in 2013 and 2014, their prices triggered congressional hearings, investigations, and “questions about whether drug pricing in America is sustainable," Pearson said.

As gene therapies proliferate, the industry could run into that type of scrutiny once again, Pearson argued.

“If we hit that with gene therapy, it could lead to a whole new round of thinking about whether we need formal governmental price regulation or control,” Pearson said.

A sickle cell disease gene therapy may be the first to really test the system, but “there will be other [diseases] where we have gene therapy for things that afflict a lot of Americans," Pearson said. Bluebird bio is advancing a sickle cell disease gene therapy and plans an FDA filing next year. 

As the industry moves deeper into gene therapy, Pearson hopes companies will consider affordability when pricing their products. If they don’t, they might encounter a “pretty tough brick wall,” he said.